Monday, June 09, 2008

Oil: How long till the Europeans get smart..

As prices across America hit an average $4 a gallon over the weekend, European motorists, truckers and economic planners wrestled with fuel costs around twice as high, blamed not only on the soaring price of oil but also high government taxes levied at the fuel pump.

That has made few people happy. In the latest show of distress, Spanish truckers Monday began a blockade of their country’s border with France, lining up their rigs in a crawling strike to protest the cost of diesel. In France, farmers on their tractors did the same, offering a foretaste of a planned national strike by truckers next Monday.

Anyway, those guys should be protesting at the Saudi Arabia, Venezuela, UAE embassies, and not create a mess for everybody, not turning the whole country upside down in the hope thatt he government gives them some subsidies. Why don't they raise their prices, as we all do when our costs raise? Yes, it would hurt the consumer eventually, since the increase would pass along the chain, but it would allow us to either clench our teeth and pony up, or change our habits. Neither of the two possibilities sounds as holding the whole country hostage, does it?

Not very helpful, I'm afraid. Some estimates are that the top thirty percent of the market price per barrel is speculative.

If the Europeans paid attention, they'd recall those taxes were always there and it's not going to help by shifting net tax revenues over to some other economic sector in order to subsidize transportation fuel costs

What they SHOULD be looking at is the failure of the US to address its part in easing the speculation.

You'd think with gas prices topping $4 and consumers crying uncle, Congress would be moving fast to spur development of a domestic oil resource so vast - 800 billion barrels of recoverable oil shale in Colorado, Utah and Wyoming alone - it could eventually rival the oil fields of Saudi Arabia.

You'd think politicians would be tripping over themselves to arrange photo-ops with Harold Vinegar (whom I profiled in Fortune last November), the brilliant, Brooklyn-born chief scientist at Royal Dutch Shell whose research cracked the code on how to efficiently and cleanly convert oil shale - a rock-like fossil fuel known to geologists as kerogen - into light crude oil.

You'd think all of this, but you'd be wrong.

Last month, the U.S. Senate's Appropriations Committee voted 15-14 to kill a bill that would have ended a one-year moratorium on enacting rules for oil shale development on federal lands (which is where the best oil shale is located). Most maddening of all - at least to someone like myself not steeped in the wacky ways of Washington - the swing vote on the appropriations committee, U.S. Sen. Mary Landrieu, D-La., voted with the majority even though she actually opposes the moratorium.

"Sen. Salazar asked me to vote no. I did so at his request," Landrieu told The Rocky Mountain News. A Landrieu staffer contacted by Fortune doesn't dispute this, but notes that Landrieu did propose a compromise which Republicans rejected.

That's good.. blame it on Republicans, without defining WHY they might have rejected it. But that's beside the point... Republicans have shown to not be averse to having their pockets lined with special interest money.As long as that money doesnt come from ' big oil' which is the 'antichrist'.

For Colorado's Senators, it's easier to figure out WHY they balk.. even if that goes against their state's overall economic interest. Again, follow the money.. not far.. just to Aspen and Boulder.

It's no secret, just under-remarked that Colorado has turned blue politically in the last twenty years and much of that is due to an exodus from California of various blends of the rich liberal leisure class. Oregon doesnt want them anymore and said so at the end of the eighties.

So they move to the next best. In the process, giving credence to a view that Aspen is the center of liberal interests in Colorado and the University of Colorado is their center of 'informed thought'. Which resulted, of course, in such as Ward Churchill.

Ah, but back to oil... The interview does touch on the nut of the issue:

Quote:

Fortune: Has oil shale development always been a partisan issue or is this something new?

Sen. Allard: It is something new. The issue with the Democrats now is they want to cut off any source of carbon. And there are those in the Senate who believe the more expensive you make gasoline, the less driving people do and you force conservation by making driving so expensive people can't afford it.

Well.. the rich will always be able to afford to drive, whatever the price. We arent talking about the guys who live in Aspen.. or in Boulder, either.

We're talking about Joe Sixpack, who works in construction or in factories, or has his own service business. What galls the liberals is that Joe barely made it out of high school and yet has the temerity to own 2.5 cars, a motorcycle, and a boat which he uses to go waterskiing a couple weekends and one week a year.

In any JUST society, Joe would have a delivery truck, used only for business, maybe a motorcycle but a bike would would be better, and all else would ride public transit. His watersports would consist of a picnic on the riverbank and riding the ferry.

While those who invested tens thousands in their academic liberal arts education would have their salaries adjusted appropriately and they would have the toys of leisure. As befitting their learnedness and ability to expound on all things philosophical.

And if we actually started drilling in all the known fields in the US, the bottom would drop out of oil futures, and the powers that be would actually have to raise taxes to keep fuel prices up. Thus be transparent.

For now, they are content to go on pocketing cash from the leisure liberals while paying lip service to green groups.If only we could figure a way to siphon a percentage of oil revenue from these new fields directly into the politicians bank accounts, the problem would be solved.

UPDATE:Well, Look at this... via ProteinWisdom...According to the Guardian the highly educated and informed people at the World Bank have come to the same conclusion I, using only common sense, came to years ago.Does that make me smart? No... it makes the case for stepping back and thinking about what you are really doing.